Stash, a startup headquartered in New York that enables consumers to save up small amounts of money through micro-investing, has landed $40 million in venture capital funding.
According to a news report, the round of VC funding was led by Coatue Management, the fund manager. Existing investors including Breyer Capital, Goodwater Capital and Valar Ventures, the venture capital firm of PayPal co-founder Peter Thiel, also took part in the round of VC fundraising.
Stash lets users micro-invest via an app geared toward low-income consumers who have traditionally been shut out of the investment world. With as little as $5, users can pick from more than 30 exchange-traded funds that the investment team at Stash chooses. The app costs $1 per month for accounts with less than $5000 and enables automatic investment to help the amount of money invested via Stash grow over time. There is also a 0.25 percent annual fee for accounts that have more than $5,000 invested, noted the report.
“We help people who don’t have a lot save money on a weekly basis,” Brandon Krieg, chief executive and co-founder of Stash, said in an interview. “Stashers look like America, they look like people you meet every day: They are nurses and teachers and Uber and Lyft drivers.”
According to the news report, the startup services 850,000 accounts and has added half a million investors since the beginning of the year. Roughly 86 percent of the users are first-time investors.
The company thinks it stands out from the pack because of its monthly subscription fee, which differs from robo-advisors, which typically charge a fee dependent on the amount of money under management. Krieg said in the report the monthly subscription fee makes it less reliant on growing the amount of money its clients invest via the app.